relating to director
This query is : Resolved
Vishnu Agarwal
(Querist)
12 August 2008
what is the meaning of deemed director?
what is the meaning of deemed director?
Vishnu Agarwal
(Querist)
12 August 2008
reply as early as possible
reply as early as possible
26 September 2008
In american contest not indian contest
THE PROFESSIONAL ADVISOR AS A DEEMED DIRECTOR
Introduction
The American cynic Ambrose Bierce defined a corporation as “An ingenious device
for obtaining individual profit without individual responsibility.”1 Although written
almost a century ago the definition reflects a current perception that the privilege of
limited liability provided by a corporate vehicle is often abused.
The Corporations Act 2001 does impose, as does other legislation, individual
responsibility on directors of companies in some circumstances. This paper analyses
the extent to which persons who are deemed to be directors, even though not formally
appointed, can be at personal risk.
The emphasis will be on professional advisers, although the position of some others
will also be examined.
The specific risks will be reviewed and precautions will be suggested to minimise
those risks.
The question is when do professional advisers cease to be advisers and become
exposed to personal liability as deemed directors ? Put another way, when can a
professional adviser “be said to have traversed that nebulous line into the treacherous
realm of shadow directorship…” ? 2
THE PROFESSIONAL ADVISOR AS A DEEMED DIRECTOR
Introduction
The American cynic Ambrose Bierce defined a corporation as “An ingenious device
for obtaining individual profit without individual responsibility.”1 Although written
almost a century ago the definition reflects a current perception that the privilege of
limited liability provided by a corporate vehicle is often abused.
The Corporations Act 2001 does impose, as does other legislation, individual
responsibility on directors of companies in some circumstances. This paper analyses
the extent to which persons who are deemed to be directors, even though not formally
appointed, can be at personal risk.
The emphasis will be on professional advisers, although the position of some others
will also be examined.
The specific risks will be reviewed and precautions will be suggested to minimise
those risks.
The question is when do professional advisers cease to be advisers and become
exposed to personal liability as deemed directors ? Put another way, when can a
professional adviser “be said to have traversed that nebulous line into the treacherous
realm of shadow directorship…” ? 2
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